143 IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH RSA No. 1333 of 2017 (O&M) Date of Decision: 20.07.2026 Sehdev Jindal .......... Appellant Versus State of Punjab and others .......... Respondents CORAM: HON'BLE MR. JUSTICE HARKESH MANUJA Present:- Mr. Ashish Grover, Advocate for the appellant-plaintiff. Mr. Arun Jindal, Additional Advocate General, Punjab for the respondents-defendants. **** HARKESH MANUJA, J. (ORAL) The appellant-plaintiff has filed the present Regular Second Appeal assailing the judgment and decree dated 13.11.2014 passed by the learned Civil Judge (Senior Division), Bathinda whereby his suit was dismissed, and judgment and decree dated 10.11.2016 passed by the learned District Judge, Bathinda affirming the dismissal of the suit on merits while reversing the finding on the issue of jurisdiction. [2] Briefly stated, the appellant retired from service as an Executive Engineer on 31.08.2009 from Mansa on attaining the age of superannuation. Certain disciplinary proceedings were pending against the plaintiff on the date of retirement, the competent authority subsequently dropped the same as conveyed vide letters dated 08.04.2010 and 20.04.2010. It was pleaded that even after the dropping of disciplinary proceedings, his regular pension DINESH KUMAR 2026.07.24 14:51 I attest to the accuracy and integrity of this document RSA No. 1333 of 2017 (O&M) -2- was not sanctioned, his pension papers were not forwarded to the office of the Accountant General, Punjab, and amounts payable towards gratuity, commutation of pension and leave encashment were also withheld. Consequently, he instituted a civil suit seeking a declaration that he was entitled to release of all retiral dues together with interest at the rate of 18% per annum on account of delayed payment. During the pendency of said suit, retiral benefits i.e. leave encashment as well as gratuity amount were released to the plaintiff on 15.05.2012 and 01.11.2014 respectively, and surviving dispute was confined to claim for interest on delayed payment. [3] Defendants No.1 to 4 and 6 filed a joint written statement, whereas defendant No.5 filed a separate written statement. The defence of the respondents, in substance, was that the plaintiff was not entitled to the relief claimed; that delay in release of retiral benefits was justified as the same was procedural; that the suit was not maintainable; and that the Civil Court at Bathinda lacked jurisdiction to entertain the claim. [4] The plaintiff did not choose to file any replication and expressly made a statement before the Trial Court that he did not intend to file one, as recorded by learned trial Court in its order dated 23.04.2014, though an application under Order 11 Rules 1 and 2 CPC was filed seeking interrogatories, which was disposed of on 23.04.2014. [5] After hearing learned counsel for the parties, learned Trial Court framed following issues: 1. Whether the plaintiff is entitled to the relief of declaration as prayed for? OPP 2. Whether the plaintiff is entitled to interest @ 18% per annum? OPP DINESH KUMAR 2026.07.24 14:51 I attest to the accuracy and integrity of this document RSA No. 1333 of 2017 (O&M) -3- 3. Whether the suit is not maintainable in the present form? OPD 4. Whether the plaintiff has not approached the Court with clean hands? OPD 5. Relief. [6] The plaintiff examined himself as PW-1 in support of his case whereas the defendants, examined official witnesses and also produced departmental record in support of their defence. [7] Upon appreciation of the pleadings and evidence, Issues No.1 to 3 were decided against the plaintiff, whereas Issue No. 4 was not pressed by the defendants. The learned Civil Judge (Senior Division), Bathinda dismissed the suit with costs vide judgment and decree dated 13.11.2014. [8] Aggrieved therefrom, the plaintiff preferred appeal bearing CA No.123 of 2014. The learned District Judge, Bathinda, vide judgment dated 10.11.2016, disagreed with the findings of Trial Court on the issue relating to the jurisdiction of the Civil Court and held that the suit was maintainable at Bathinda. However, findings on the substantive issues relating to entitlement of the plaintiff were affirmed, resulting in dismissal of the appeal while observing that there was no intentional or unexplained delay in releasing the retiral benefits of the plaintiff. Hence, this present Regular Second Appeal. [9] Heard learned counsel for the parties and gone through the paper book and record. [10] Admittedly, during pendency of the suit all retiral benefits stood released and dispute is confined only to interest on delayed payment. It is submitted that during cross examination of plaintiff, he admitted that charge- DINESH KUMAR 2026.07.24 14:51 I attest to the accuracy and integrity of this document RSA No. 1333 of 2017 (O&M) -4- sheet had indeed been pending on the date of retirement; provisional pension had been sanctioned; and an amount of Rs.13,03,889/- stood reflected as outstanding in ‘Public Works Miscellaneous Advance against him’. These admissions justify withholding of benefits during the pendency of the proceedings. [11] DW-1 Shammi Kumar Singla, Executive Engineer, proved number of departmental documents including Ex.D-1 to Ex.D-24. These documents consist of departmental correspondence, pension papers, communications with the Accountant General, reply to the legal notice, gratuity bill and inter-departmental letters. It was deposed that pension papers were sent to the Accountant General;objections were raised;papers were returned for compliance and pension was processed after completion of departmental formalities which was released after proceedings had been dropped. [12] DW-2 Amarjit Singh Sandhu deposed that the plaintiff, while posted in Patiala Drainage Division from 08.11.1993 to 22.07.1996, made payments of Rs.13,03,889/- pertaining to various works without obtaining approval of rates from the competent authority and without observing codal formalities, and therefore the amount was placed in the Miscellaneous Advance account. [13] The defendants primarily relied upon departmental correspondence.Ex.D-7 and Ex.D-9 to Ex.D-20 consist of movement of pension papers between different departmental authorities and the Accountant General. Ex.D-21 is the gratuity bill, whereas Ex.D-8 is the departmental reply to the statutory notice served by the plaintiff. DINESH KUMAR 2026.07.24 14:51 I attest to the accuracy and integrity of this document RSA No. 1333 of 2017 (O&M) -5- [14] These documents undoubtedly establish that the file continued to move between different offices. However, the issue is whether mere movement of files constitutes a legal justification for withholding retiral benefits after the disciplinary proceedings had already culminated and dropped. [15] In humble opinion of this Court, the Departmental correspondence merely explains how the file moved. It does not establish why the employee should be deprived of his pensionary benefits after there remained no subsisting disciplinary proceedings.Administrative movement of files is an internal matter of the Government.An employee who has already retired cannot ordinarily be made to suffer for inter-departmental correspondence unless the delay is shown to have been occasioned by his own omission or default. [16] The record itself contains extracts from the Punjab Civil Services Rules. Rule 9.13 exhibited as Ex.D-1 (2/3) specifically contemplates payment of interest where gratuity is authorised beyond the prescribed period and the delay is attributable to administrative lapse, provided the employee is not responsible for such delay. relates to withholding of gratuity until the conclusion of departmental proceedings and similarly, provision relating to leave encashment i.e. Rule 8.21 (aa) of Punjab Civil Services Rules, Ex.D-2 (2/2) recognise withholding of leave encashment during pendency of disciplinary proceedings where recovery may become necessary. [17] Significantly, these provisions justify withholding during pendency of proceedings. They do not declare that, after the proceedings DINESH KUMAR 2026.07.24 14:51 I attest to the accuracy and integrity of this document RSA No. 1333 of 2017 (O&M) -6- have concluded, the Government may indefinitely retain the retiral dues merely because departmental approvals are still in progress. [18] The appellant has specifically relied upon the judgment of Full Bench of this Court in A.S. Randhawa vs. State of Punjab, 1997 (3) SCT 468, to contend that retiral benefits ought ordinarily to be released within a reasonable period and that interest is the normal recompense where the retiree is deprived of the use of his money without legal justification. [19] Neither the Trial Court nor the First Appellate Court has examined the ratio of the said Full Bench while deciding the entitlement of the appellant in respect to interest on delayed payment of retiral benefits after the disciplinary proceedings had admittedly been dropped. [20] Besides reference to the case of A.S. Randhawa (supra), gainful reference can be made to judgment of Hon’ble the Supreme Court in case of Vijay L. Mehrotra vs. State of U.P., 2000(4) SCT 267. While considering the appeal only on the question of grant of interest on the delayed payment of retiral dues, the Hon’ble Supreme Court has observed that in such circumstances, interest has to be paid on the delayed payment of retiral dues, in case there is no reason or justification for not making payment. It observed: “3. In case of an employee retiring after having rendered service, it is expected that all the payment of the retiral benefits should be paid on the date of retirement or soon thereafter if for some unforeseen circumstances the payments could not be made on the date of retirement. 4. In this case, there is absolutely no reason or justification for not making the payments for months DINESH KUMAR 2026.07.24 14:51 I attest to the accuracy and integrity of this document RSA No. 1333 of 2017 (O&M) -7- together. We, therefore, direct the respondent to pay to the appellant within 12 weeks from today simple interest at the rate of 18 per cent with effect from the date of her retirement, i.e. 31-8-1997 till the date of payments.” [21] Similarly, in case Ex. Capt. R.S. Dhull vs. State of Haryana, 1998(2) SCT 729, Hon’ble the Supreme Court observed that retiree is entitled to interest @ 12% per annum on the withheld GP Fund and Gratuity etc., from the date the same became payable to him on his attaining the age of superannuation till the date the payment is made to him. [22] It is also well settled that proper time for the disbursement of retiral benefits will depend on the facts and circumstances of each case but normally it would not exceed three months from the date of retirement which time limit has been laid down by the Apex Court in State of Kerala vs. M. Padmanabhan, AIR 1985 SC 356; D.D. Tewari (D) through LRs vs. Uttar Haryana BijliNitran Nigam Ltd., 2014(4) S.C.T. 128; J.S. Cheema vs. State of Haryana & others, 2014(3) RCR (Civil) 355; and Manohar Lal vs. State of Punjab & others, 2016(4) SCT 250 as well as judgment of Madhya Pradesh HighCourt in case SudhaChhipa& others vs. State of M.P. & others, 2014 LIC 2125. While following the Full Bench decision in the case of A.S. Randhawa (supra), this Court in Amarjit Kaur vs. State of Punjab & others, 2011(1) Service Cases Today 85, where there was delay of 16 years in payment of retiral benefits, has awarded interest @ 18% per annum on the delayed payment. [23] Adverting to the facts of the present appeal, the appellant retired on 31.08.2009 and disciplinary proceedings against him were dropped in DINESH KUMAR 2026.07.24 14:51 I attest to the accuracy and integrity of this document RSA No. 1333 of 2017 (O&M) -8- April, 2010 whereas leave encashment was released to him on 15.05.2012 and gratuity on 01.11.2014. Accordingly, this Court is satisfied that the Courts below did not examine whether the delay thereafter was legally justifiable; the documentary evidence was considered only to show movement of files and not to determine whether any act or omission of the appellant contributed to the continued withholding of his retiral dues after the disciplinary proceedings had ended; the law governing delayed payment of retiral benefits. [24] The foundation of both the judgments is that the delay in release of retiral benefits after dropping of the disciplinary proceedings was merely procedural and, therefore, no interest was payable. This reasoning, in the considered opinion of this Court, cannot be accepted. It is not in dispute that the disciplinary proceedings pending against the appellant were ultimately dropped by the competent authority. It is equally undisputed that during the pendency of the suit the respondents released all retiral benefits and the appellant confined his claim only to interest on the delayed payments. [25] The evidence led by the respondents establishes movement of the pension papers between different departmental authorities, correspondence with the Accountant General, and compliance with various departmental objections. Ex.D-7 to Ex.D-20 are essentially departmental communications, while Ex.D-21 is the gratuity bill. However, none of these documents demonstrates that after the disciplinary proceedings had been dropped, the appellant himself committed any default which legally prevented the respondents from releasing his retiral dues. Administrative correspondence between different offices cannot, by itself, constitute a DINESH KUMAR 2026.07.24 14:51 I attest to the accuracy and integrity of this document RSA No. 1333 of 2017 (O&M) -9- defence to a claim for interest. Internal procedural delays are matters within the exclusive control of the employer and cannot ordinarily be permitted to prejudice a retired employee whose right to pensionary benefits had already accrued. [26] The first Appellate Court observed that the delay was "not intentional" and “unexplained”. In present case, a retired employee is deprived of the beneficial use of his money irrespective of whether the delay is deliberate or merely administrative. The purpose of awarding interest is compensatory and not penal. The Punjab Civil Services Rules themselves recognise payment of interest where gratuity is delayed on account of administrative lapse, provided the employee is not responsible for the delay. [27] Accordingly, the impugned judgment and decree dated 13.11.2014 passed by the learned Civil Judge (Senior Division), Bathinda and judgment and decree dated 10.11.2016 passed by the learned District Judge, Bathinda are set aside and modified to the extent they reject the appellant's claim for interest. Consequently, the suit filed by the appellant deserves to succeed. The suit filed by the plaintiff-appellant is decreed with the following directions: (i) It is declared that the appellant is entitled to interest @ 9% on the delayed release of his retiral benefits for the period during which the same remained unjustifiably withheld after the disciplinary proceedings had been dropped by the competent authority. (ii) The respondents shall calculate the amount of interest payable in accordance with law after determining the DINESH KUMAR 2026.07.24 14:51 I attest to the accuracy and integrity of this document RSA No. 1333 of 2017 (O&M) -10- respective dates on which each retiral benefit became payable and the dates on which payment was actually released. (iii) The calculated amount shall be released to the appellant within a period of three months from the date of receipt of a certified copy of this judgment, failing which the amount so determined shall carry interest @ 12% in accordance with law till actual payment and in case of any default thereafter, the respondents shall be liable to pay costs of Rs. 1,00,000/- (one lakh only) per month to the appellant. [28] The present appeal is allowed in the above terms. Decree sheet be prepared accordingly. [29] Pending miscellaneous application(s), if any, shall also stand disposed off. July 20, 2026 ( HARKESH MANUJA ) 'dk kamra' JUDGE Whether Speaking/reasoned Yes Whether Reportable Yes DINESH KUMAR 2026.07.24 14:51 I attest to the accuracy and integrity of this document